KARACHI: The United Kingdom, not China, received the highest amount of profits and dividends on foreign investments in FY24, showed the State Bank of Pakistan’s data on Wednesday.

China has been in the media regarding profits of independent power producers (IPPs) as solid resistance from all sections of Pakistani society has emerged against the staggering capacity payments to all IPPs.

The SBP data showed that the profit outflow to the UK was $558.6 million and that to China was $193m in FY24. In the preceding fiscal year, the outflow to the UK was just $20m and China $83m.

In FY24, almost a quarter of the total profit and dividends were repatriated to the UK, while China stood fourth. The profits outflow on foreign investments was restricted to $331m in FY23 against a record $2.215 billion in the outgoing fiscal year.

The second-highest amount was repatriated to the UAE, surging to $273m in FY24 compared to a meagre $14.8m in FY23. The UEA has the biggest investment in Pakistan’s banking sector. The sector’s profitability almost doubled in calendar 2023 over the preceding year.

China and the UAE have provided additional help by keeping billions of dollars in the State Bank account to boost the dwindling foreign exchange reserves. Pakistan is negotiating with China and the UAE to reschedule loans.

Other countries also saw significant profits repatriated from Pakistan’s foreign investments in FY24. The Netherlands received $240m, the USA $158m, France $108.8m and Kuwait $96m.

The SBP allowed most of the repatriation in the second half of FY24.

Published in Dawn, August 1st, 2024